Baltimore Office Market Figures Q4 2022

The Baltimore office market posted a second consecutive quarter of positive absorption, recording 193,447 sq. ft. of occupancy gains during the fourth quarter. This was the first time Baltimore saw two quarters of positive absorption since the first half of 2019. Despite positive absorption, vacancy increased 30 basis points (bps) over the prior quarter due to the delivery of new vacant space to the market. The vacancy rate across the Baltimore office market is up 2.5 percentage points from the rate pre-pandemic.

Gross leasing activity picked up this quarter with 1.3 million sq. ft. leased, a 695,000 sq. ft. increase from Q3 levels. In total, tenants leased 3.25 million sq. ft. during 2022, up 500,000 sq. ft. from 2021 and 2020. Government tenants dominated the top transactions of the fourth quarter followed by financial services and technology. Despite another quarter of improved demand, occupancy losses earlier in the year caused the market to record 98,072 sq. ft. of negative absorption for the year.

The Baltimore City East submarket posted nearly 50,000 sq. ft. of positive absorption during the quarter, with Morgan Stanley moving into 34,653 sq. ft. at 1201 Wills Street, and McCormick Taylor moving into 14,142 sq. ft. at 1501 S Clinton Street. Sublease availability in Baltimore remains elevated at 1.5 million sq. ft., which is 94% higher than pre-pandemic levels, and has fluctuated between 1.4 million and 1.6 million sq. ft. in recent months.